Wal-mart bosses preach integrity
Annual meeting upbeat despite Mexican bribery allegations
FAYETTEV ILLE, ARK. – Wal-Mart Stores Inc. executives told shareholders they would not stand for unethical behaviour at the world’s largest retailer, whose shares have soared to 12-year highs as strong results more than offset concerns about bribery allegations.
Friday’s annual shareholders meeting was the first time that chairman Rob Walton, a son of Wal-Mart founder Sam Walton, publicly addressed the issue of possible bribery in Mexico. Both he and chief executive Mike Duke were named in an April New York
Times report that suggested that Wal-Mart executives knew of bribes paid to officials in Mexico and squelched an internal investigation.
Despite the scandal, WalMart’s meeting served largely as a 50th anniversary party. The upbeat event was hosted by actor and singer Justin Timberlake and featured
performances from Taylor Swift, Lionel Richie, Celine Dion and other entertainers.
“Acting with integrity is not a negotiable part of this business. It is our business, we will not tolerate violations of the FCPA or ethical wrongdoing of any kind,” Walton said, referring to the U.S. Foreign Corrupt Practices Act, which prohibits bribing foreign officials.
The New York Times reported that management at Wal-Mart de Mexico, or Walmex, allegedly had orchestrated bribes of $24 million to help it grow quickly and that Wal-Mart’s top brass had tried to cover it up. Now, the U.S. Department of Justice, the U.S. Securities and Exchange Commission and government agencies in Mexico are investigating the allegations while Wal-Mart conducts an internal probe. The allegations in the New
York Times piece also have spawned 11 derivative lawsuits, which seek recovery for the company rather than shareholders, and one securities lawsuit, Wal-Mart disclosed in a regulatory filing hours after the events finished on Friday.
“Let me be clear: Wal-Mart is committed to compliance and integrity everywhere we operate,” Duke said in a forceful tone. “If you work for WalMart, there is no grey area between right and wrong. It’s either the right thing to do, or it shouldn’t be done at all.”
Pension funds and a scrappy group of employee shareholders were among those who had called for the removal of leaders such as Walton and Duke from the board for their alleged connection to the scandal. But that attempt failed; every company nominee was elected. The number of shares voted for and against each of 16 board members will be disclosed on Monday, Wal-Mart said.
“We have seen what happened with Mexico, when some people were so focused on growth at any cost they forgot our code of ethics,” said Jackie Goebel, 60, a company employee for 24 years.
Goebel belongs to the Organization United for Respect at Walmart, which is affiliated with a major grocery union and spent the last couple of days encouraging stockholders to vote against Duke and Walton.